MonitorsPublished on Feb 20, 2018
South Asia Weekly Report | Vol. XI Issue 8


Bhutan: Fifty years of diplomatic relations with India

Mihir Bhonsale The year 2018 marks the completion of 50 years of the Himalayan kingdom’s diplomatic relations with India. Bhutan marked this occasion by opening a Consulate in the north-eastern Indian city of Guwahati earlier this month. Earlier, a commemorative logo was launched in New Delhi. The journey of diplomatic relations between the two nations began with New Delhi’s appointment of a residential representative in 1968. The relations between the two nations, in fact, go back to the signing of the ‘Treaty of Friendship and Cooperation in 1949’ while the  civilizational and cultural linkages between the two date back to at least over a thousand years at least. Incumbent Indian Prime Minister Narendra Modi’s visit to Bhutan was his first to any foreign country after assuming office in May 2014. During his visit to Thimphu, Modi had said: “Bharat should stand for Bhutan and Bhutan for India.” The thrust placed by the Indian Prime Minister on reciprocity signalled a new dimension in the relations and the importance of the Himalayan kingdom for New Delhi.

Rare combination

The Bhutan-India friendship model is unique for the uneven size, dissimilar form of the government structure and un-equal resources. The special place that Bhutan’s monarchs accorded to India and reciprocated by New Delhi have been a defining feature of relations. Relations between India and Bhutan historically hinge over soft-power. The spread of Buddhism to Bhutan and the importance of India by the saint-philosopher, Guru Padmasambhava, cemented a deep bond between the two lands and their people. Later on, India became the alma mater for successive kings of Bhutan. In the 21st century, the India-Bhutan Friendship Treaty was revised adding more contemporaneousness to the change in Bhutan, from late 1950’s to 2007. This was also the time when the fourth king of Bhutan, Jigme Singhe Wanchuk, abdicated the throne voluntarily in favour of his son and current ruler, Jigme Khesar Namgyel Wangchuck, and also declared that the kingdom would become a democracy, and conducted the first general elections to the national parliament.

 ‘Act East’ policy

Relations between the two countries now include cooperation in hydropower and trade worth about $ 270 million in 2016-17. Though the balance of trade is in favour of India, in the in-trade volumes and variety, it has made great strides. India has since unveiled the ‘Act East’ policy for strategic and economic engagement with the nation’s East and South-East Asian neighbours, including Bhutan. Like the Himalayan kingdom of Bhutan, India’s North-Eastern Region (NER) is also land-locked. The Bangladesh-Bhutan-India-Nepal (BBIN) Motor Vehicles Agreement, signed in 2015, was a way forward to bettering connectivity and trade in the sub-region as well as in the interests of Bhutan. The BBIN-MVA also sent a strong message to Pakistan who had vetoed upon a proposal similar to the BBIN-MVA under the SAARC. The two countries now realise the importance of harnessing the India’s NER ant the Act-East imperative of India. The opening of a consulate office in Guwahati, Thimphu, could tap not just markets of India’s NER, but also expect investments. The NER is also receiving hydropower from Bhutan. Already, the Kuricchu hydropower station is supplying its excess hydropower to Rangiya in Assam. With the possibility in the growth of industries and trade, more demand is likely to be raised from Bhutan for hydropower. India has clarified on the provisions of the ‘Guidelines on Cross Border Trade of Electricity’ in order to regularise electricity trade with its neighbour Bhutan. The region (and the State of Assam) is an important gateway for access to other parts of India for southern Bhutan. Realising the importance of the border trade point connecting Samdrup Jhonkar, the two countries are upgrading it into an Integrated Check Post. Potential for tourism is also high considering which, Bhutanese airlines Druk Air will begin operations from Singapore to Bhutan via Guwahati. There are already flights from Bangkok to Paro via Guwahati. By joining hands with North Eastern States to promote tourism, the two nations are set to benefit. Besides West Bengal, now Assam also has an MoU with Bhutan for cooperation in tourism. There is much scope for collaboration between the private sectors in the two countries. Bhutan’s nascent private sector could take a leaf out of India’s experience and hopefully in a few years, allow Foreign Direct Investment (FDI) in the country. This is especially so because increasing productive capacity is important for the graduation out of the ‘Least Developed Country’ (LDC) tag under the UN norms. The writer is a Junior Fellow at Observer Research Foundation, Kolkata

Nepal: Domestic elections from the Indian perspective

Sohini Nayak The world has been keeping a keen eye on the process of democratic transition in Nepal that has finally culminated in the victory of the Leftist Alliance. The Communist Party of Nepal-Unified Maxist Leninist (CPN-UML),     the largest party, has chosen its chairman, Khadga Prasad Sharma Oli, to be the new Prime Minister. More than a decade after the end of the Maoist rebellion, the Himalayan country was in much need of a peaceful metamorphosis that would finally enable proper foreign investments and the resultant economic progress. With the new Constitution of 2015, the process was seen towards moving in the right direction and the 2017 parliamentary and National Assembly elections further re-assert the intensity of such amelioration towards change. High hopes have been placed on the federal system as the country has already emerged successful in overcoming the bottlenecks present in the convoluted procedural trail of balloting. Now, with the Nepali Congress and its President Sher Bahadur Deuba out of power, the entire dynamics of the country along with the negotiations with the neighbours will distinctly change thereby commencing a new phase in the international relations and power politics in South Asia.

Roots of inconvenience

Generally connoted as the ‘buffer state’ and the ‘big brother’ in the sub-region, Nepal and India have always had their ties oscillating from one extreme to the other. When Indian Prime Minister Narendra Modi made his first visit to the neighbour in 2014, the tweak of disagreement was much evident while the new Constitution was being drafted by the Nepali Congress. In the aftermath of the implementation of this new national architecture, a lot of contrary-sentiments were garnered as the Constitution was supposedly exclusive of the Madhesi and the Janjati acknowledgments. Though portrayed as a non-interfering stance by India, Modi’s suggestion of consensus-building as opposed to a numerically-determined approach for the Constitution was conspicuously seen as being ignored. The 16-Point agreement between the Government and the opposition, as the basic undercurrent of the framework, had failed. In such circumstances, India had tried to intervene with amendments to the same with the special envoy of then Foreign Secretary, S. Jaishankar.  However, the calculation on India’s end was a failure and led to further severing of diplomatic ties and Nepal viewing the step as one of meddlesomeness. Apart from this, the Madhesi agitation and the interruption in the movement of goods resulting in the ‘blockade’ supplemented the already low bond. It was during this time that senior leaders like K.P Sharma Oli had blamed India for such a showdown.

Chinese conduciveness

The Sino-Nepal bond is one of greater closeness, much to the dismay of India. In 2016 itself, the then PM, Oli, had reached out for Chinese investments and had also signed the transit agreement. Moreover, the two countries are also working together in the much progressive and ambitious OBOR (One Belt One Road) project. It is looks quite obvious that the new government would be pro-Chinese as it leans left,  but need not be absolutely anti–India given the recent emphasis of the Ministry of External Affairs to focus on the ‘neighbourhood first’ policy. If such policies are not undertaken, foreign policy would not only be restricted in one sphere of the Chinese ball game but also the country would not be able to benefit from newly developing structures like the BBIN (Bangladesh, Bhutan, India, Nepal) collaboration. Nepal is trying its best to limit its dependence on India, ranging from internet to petrol. However, the fact that the BBIN and BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) are natural allies cannot be ignored as well. In order to make its presence felt in South East Asia and also to accommodate its trade and transit through India, being a landlocked nation, Nepal has to tread carefully. Furthermore, India might be regarded as a fulcrum around which such initiatives rotate, it being the major power with economic stability and concrete democracy. If Nepal is not in the good books of India, it might not neither be able to harness the true potential of the BBIN nor the BIMSTEC.

Hostile end?

The recent visit of the Indian Minister of External Affairs, Sushma Swaraj, to Nepal, right amidst the election fever, hints at India’s apprehensions and also the effort to regenerate warmer connections between the two countries. The relationship is even more special because of the porous borders with Nepalese nationals working and generating employment through India and the immense Nepalese potential for hydro-power generation that is of immense interest to the latter. In a situation where the possibility is more towards the hostile end and the presence of China, the only possible idea would be the identification of newer domains where India and Nepal can collaborate together with mutual interests and trust. This concern is more so because this government is likely to survive the tenure of five years that has not happened in Nepal after its first election. Thus, with the massive turnout of the common people at the election booth, along with their sensitivity towards the establishment of a democracy, Nepal is at its most important stage of transformation. This situation has been viewed by New Delhi with hopes of extending collaboration and also removing the past notions that were unnecessarily bitter in experience. This initiative is not only to check the advancement of China towards the south but also to create a peaceful neighbourhood that would promote the sub-region in a positive light. The election brings in the probability of shaping a new future of Indo-Nepal connectivity. The writer is a Research Assistant at Observer Research Foundation, Kolkata Chapter

Country Reports


10,000 victims in 2017

The Annual Report of the United Nations Assistance Mission in Afghanistan (UNAMA) reports a total of 10,453 casualties in the year 2017, owing to the conflict raging ceaselessly through Afghanistan. The statistics reflects the horror being inflicted upon the Afghans especially women and children. There has also been an increase in the use of suicide bombs and pressure-plate devices in civilian populated areas. Sixty-five per cent of these casualties have been attributed to anti-government elements operating in Afghanistan.

Letter for peace

The Taliban group issued a newsletter to America, to find a way for peaceful resolution of issues to end the conflict. US President Donald Trump refused to hold talks with the Talibans after the Kabul attacks. He added that America was repulsed at the atrocities that were happening in Afghanistan. The Afghan and US officials have not yet responded to the Taliban letter. However the officials had earlier mentioned that doors will always be open for negotiations.

US budgets for defence

As efforts are currently underway to develop the Afghan defence infrastructure and security forces by the Afghan government, its allies are also making similar efforts. A request for allotting $ 5.2 billion for the Afghan Security Forces Fund has been made in the US defence budget for the financial year of 2019. A large portion of this sum will be reserved for maintaining the current end-strength levels and supporting the mobilised reserve component soldiers in Afghanistan.

More troops from NATO

The North Atlantic Treaty Organization (NATO) reported that as a sign of continued commitment to the security of Afghanistan, almost twenty-eight Allies and partners have agreed to increase their troop contributions to the training mission in the country.  This will increase the number of international forces to 16,000 during 2018. They will train, advise and assist the Afghan Special Operations forces which already has tremendous achievement. This is likely to generate a greater impact on terrorism in Afghanistan.


Involving UN in Rohingyas repatriation

Aiming to avoid controversy, Bangladesh this week signed a deal to involve the United Nations in the process of repatriation of Rohingya refugees to Myanmar. Explaining the reason behind the deal with UN, Shahriar Alam, state minister for foreign affairs, said that none should accuse the government of sending Rohingyas against their will. The minister further added that the refugees would have to fill out repatriation forms in the presence of UN officials.

Battle over stocks

The media this week claimed that India and China emerged on a battle to win over a large stake in Bangladesh’s Dhaka Stock Exchange.  Officials of Dhaka Stock Exchange (DSE) claimed that chief India’s National Stock Exchange had offered 15 takas per share during a tender process this month for a 25 per cent stake in the bourse’s 1.8 billion shares.  China’s Shanghai and Shenzen stock exchanges jointly bided of 22 takas per share. The Chinese bid was approved but it was rebuffed by the country’s financial regulators and this created a controversy. The local media is accusing political interference and India favouritism.


Business flags GST issues

The private sector in the country is apprehensive about the benefits of Goods and Services Tax (GST) introduced by India last year. An Indian delegation led by GST Commissioner, Upender Gupt met with the representatives of the private sector in Thimphu. The Bhutanese participants also voiced their concerns regarding trade hurdles such as complex and lengthy trade documentation, prolonged certification process and lack of proper infrastructure in and around the border areas.

PM to sue opposition?

Prime Minister Tshering Tobgay may charge the Opposition for defamation if the corrupt practice allegation is untrue, his camp told a news conference on February 12. The Opposition on February 7 accused the Prime Minister of misusing public resources to develop his private residence at Taba. Tobgay asked the Opposition to report the matter to the Anti-Corruption


Army camp attacked

Jaish-e-Mohammad (JeM) terrorists struck the 36 Brigade of the Jammu and Kashmir Light Infantry at the Sunjuwan town of Jammu. "During the operation, the Army killed four terrorists, donning Army combat dress and carrying AK-56 assault rifles, a large quantity of ammunition and hand grenades. The terrorists were holed up inside the family quarters in the camp," defence spokesman Lt-Col Devendra Anand said.

Modi’s exam talks for students

Prime Minister Narendra Modi’s “Pareeksha pe charcha”, ahead of the Class 10 and 12 board examinations, was held at the Talkatora Stadium in Delhi on Friday. The Prime Minister answered questions posed by students on exam stress and suggested ways to distress. The aim of the government was to give ‘Sabko Shiksha, Acchi Shiksha’ said Prakash Javadekar, Education Minister

Rouhani in India

Iran President Hassan Rouhani arrived in Hyderabad at the start of his three-day visit India. In his first stop in Hyderabad, Rouhani visited the Salar Jung Museum, Golconda Fort and the Qutb Shahi Tomb. In Delhi, Rouhani discussed "the latest regional and global developments" with his counterpart Narendra Modi. He also delivered a special address at an ORF-Iran Embassy event.


SC stays ‘reinstatement’

In a surprise move ahead of the initial 15-day state of emergency ending the very day, the regime of President Abdulla Yameen has summoned the People’s Majlis or Parliament for Monday, 18 February, without any details of the day’s agenda. The 12 MPs, reinstated by the Supreme Court, too were invited to participate, but not soon after, the truncated three-Judge Bench passed an interim stay to their continuance, at the instance of the Government. The year’s maiden session, to be addressed by President Abdulla Yameen, on 5 February, was cancelled, citing security reasons, after the 1 February Supreme Court verdict, ordering freedom for nine political prisoners, leading to the current state of emergency, and arrest of then CJ and another Judge and also former President and Yameen’s half-brother, Maumoon Abdul Gayoom.

India ‘best ally’, still

In the midst of ongoing Indian concerns about the state of democracy and emergency in Maldives, President Abdulla Yameen has reiterated that the northern neighbour was his nation’s best ally. However, India’s Ministry of External Affairs (MEA) said that it would be ‘watching’ events and developments in the Indian Ocean archipelago, at the conclusion of the initial, 15-day period of emergency. Indian media reports, quoting defence ministry sources, also said that the three radars set up on Maldives to watch maritime movement in the shared seas have stopped sending signals, but their counterparts would not comment when sought.


Withholding taxes to go

In a bid to boost the economy, the Inland Revenue Department (IRD) is planning to stop levying withholding tax starting April 1 onwards. Local businesses have complained that withholding taxes are an unnecessary burden on cash flows and profits. The businessmen also asked for lower commercial tax rates on local factories involved in manufacturing goods for exports and import substitution.

MoU with Japan

The Union of Myanmar Federation of Chambers of Commerce and Industry (UMFCCI) and Japan Chamber of Commerce and Industry in Myanmar (JCCM) signed a MoU regarding on all-round economic cooperation and development on February 15. The MoU is designed to promote bilateral trade and investment, information and technology exchange, as well as human resource and infrastructural development.


Oli back as PM

After the rigorous process of Parliamentary and Provincial elections, the country finally embraced the long due democratic transition through the swearing in of the new Prime Minister, Khagda Prasad Sharma Oli. He is the second Leftist Prime Minister who has garnered a massive victory and has already formed a three member cabinet. As the 38th Prime Minister of Nepal, he extended his vote of acknowledgement through social media. With the minister of Environment and Population, Lalbabu Pandit and Tham Maya Thapa as the Minister of Women, children and Social welfare, future prospects seem bright for the country.

Nepse recovers

The Nepal Stock Exchange (Nepse) index registered a whooping gain of 36 points or 2.59 per cent after the successful appointment of the new Prime Minister, K P Sharma Oli. It was the highest single day yardstick gain. This trending digit owes its eminence to the warm feedback of the people of Nepal to the victory of the Left Alliance and also the rise in the interest rates in Banks. Through such high scores the probable booming economy of Nepal may be procrastinated.


Concern over FATF watch-list

Pakistan Foreign Office spokesperson Dr Mohammad Faisal has expressed serious concerns over placing Pakistan on FATF watch-list. FATF is an international body responsible for setting standards for combating money or money laundering and counter- terrorism operations. According to Dr. Faisal, such motions might hamper Pakistan’s economic growth. He stated that the ongoing counter-terrorism operations were evidence of army’s commitment to eradicating terrorism and that Afghanistan and India is conducting a covert smear campaign against it.

Pakistan moves to ban UN listed terror groups

In a bid to bring the national list come in line with the UN-listed terror group, Pakistan President Mamnoon Hussain has signed in an ordinance, which is expected to impact Hafiz Saeed-linked JUD and FIF along with other groups of Al Akhtar Trust and Al Rashid Trust. The promulgation of the ordinance was made on Monday.  The ordinance has been issued after a comprehensive review by the country’s top civil-military officials and intends to take action to choke funding for Hafiz Saeed and other terror groups linked to him.

External debt at $89 billion

The new challenge facing the Pakistan government is the high external debt and liabilities which has steadily grown to $89 billion since last December. The rising external debt comes amid declining foreign exchange reserves and weakening capacity to repay. The high figures point towards government’s inability to ensure non-debt creating inflows to meet external account requirements. The government has also acknowledged before the lower house of the Parliament that the country’s external debt has grown at a faster pace than its foreign exchange earnings.  This can be a major concern of the government for the upcoming elections.

Sri Lanka

UPFA quits Govt?

At the end of the week-long uncertainty attending on the continuance and stability of the ‘national unity’ Government following a severe drubbing for the main ‘Sinhala parties’, President Maithiripala Sirisena-led SLFP-UPFA has decided to quit the coalition, urging him to seek the Supreme Court’s opinion on his powers to appoint a new Prime Minister, post-19-A. According to reports, the main UNP partner in the incumbent Government, under Prime Minister Ranil Wickremesinghe, would form a new government, and was likely to recast the ministry on Monday.

Rajapaksa looks the other way

Given the inherent instability attaching to his leading a new government in the current Parliament, former President and SLPP leader that swept the nation-wide local government polls a week ago, has declined incumbent Maithiripala Sirisena-led SLFP-UPFA partner, for him to lead a new coalition dispensation. Instead, his camp has reiterated the offer to help pass a new law for facilitating fresh parliamentary polls, or to consider supporting a UPFA prime minister from outside.



Opinion Pieces

Patrick Wintour, ‘Pakistan asks Trump to help fund border fence with Afghanistan’, The Guardian, 15 February 2018 Andrew E.Kramer, ‘More Afghan Civilians Being Deliberately Targeted, U.N. Says’, The New York Times, 15 February 2018 Dr Ayesha Ahmad, ‘War: A Landscape of Trauma’, Tolo News, 13 February 2018 Ahmad Sahil, ‘National Procurement Authority’, Afghanistan Times, 12 February 2018


Afghanistan Times, ‘Pashtun Long March—soon to bear result’, 13 February 2018 Daily Outlook Afghanistan, ‘The Issue of Ignorance’, 13 February 2018 Daily Outlook Afghanistan, ‘Afghanistan Transportation Sector’, 12 February 2018 Daily Outlook Afghanistan, ‘Afghanistan: The Management Challenge of Ethnic Diversity’, 11 February 2018


Opinion Pieces

Sayeed Ovi, “The Bangladesh digital paradox”, Dhaka Tribune, 12 February 2018 Fahim Razzaq, “Why politics need to be open to change”, Dhaka Tribune, 16 February 2018



Kuensel, “Bhutan and the GST conundrum”, 16 February 2018 Kuensel, “Public or private resources?”, 14 February 2018


Opinion Pieces

Harsh V. Pant, “The challenge of ​education in India”,, 15 February 2018 Christophe Jaffrelot, “The most Hindu of them all”, The Indian Express,16 February 2018 Arvind Panagariya, “Liberating India’s colleges”, The Times of India, 15 February 2018


Opinion Pieces

Fathimath Isha, “Maldives in crisis, young people and politics”, Maldives Independent, 17 February 2018 N Sathiya Moorthy, “India’s diplomatic slowdown in Maldives”,, 14 February 2018 P K Balachandran, “Battle of Maldives is being fought overseas”, Daily Mirror Online, 13 February 2018


Opinion Pieces

Ye Min Zaw, “International Community Fails to See Myanmar for What It Is”, The Irrawaddy, 15 February 2018 Yaminn Phyu, “Where luck goes, we follow”, The Myanmar Times, 16 February 2018


Opinion Pieces

Anusa Thapa, ‘We shall overcome’, Republica, 15 February 2018 Dandapani Paudel, ‘Federal finance’, The Kathmandu Post, 14 February 2018


Republica, ‘Powering Nepal’, 12 February 2018 The Kathmandu Post, ‘The left juggernaut’, 15 February 2018


Opinion Pieces

Zahid Hussain, “Who’s afraid of Asma Jahangir”, Dawn, 14 February 2018 Syed Mohammad Ali, “Climate instigated threats”, The Express Tribune, 16 February 2018 Hassan Niazi, “The lone star”, The Express Tribune, 15 February 2018


Dawn,More attacks in IHK”, 13 February 2018 Dawn,Clarity on banned groups”, 14 February 2018 The Express Tribune,Home truths about gender inequality”, 16 February 2018

Sri Lanka

Opinion Pieces

Rajan Philips, “The government’s consummate crisis in the face of Mahinda’s un-consummatable win”, The Island, 18 February 2018 Kumar David, “Prez & PM crucified for sheltering crooks”, The Island, 18 February 2018 N Sathiya Moorthy, “A mill-stone called 19-A?”, The Sunday Leader, 18 February 2018 Rajeewa Jayaweera, “The folly of Ranil”, The Island, 18 February 2018 D B S Jeyaraj, “How Mahinda trapped Maithiripala with the SLFP party leadership?”, Daily Mirror Online, 17 February 2018 Meera Srinivasan, “Reconfiguring Sri Lanka’s Tamil politics”, The Hindu, 17 February 2018 Kusal Perera, “Tsunami alert”, Daily Mirror Online, 16 February 2018 M S M Ayub, “What is behind UNP’s lost paradise?”, Daily Mirror Online, 16 February 2018 Ameen Izadeen, “Ranil and Rajapaksa: The difference is how they play the power game”, Daily Mirror Online, 16 February 2018 N Sathiya Moorthy, “Headless chickens, all”, Ceylon Today, 15 February 2018 Malinda Seneviratne, “Mandate lost, no two words about it”, Daily Mirror Online, 15 February 2018 N Sathiya Moorthy, “With Rajapaksa’s return to centre-stage, what next for India?”,, 14 February 2018 Dr Dayan Jayatilleka, “Full spectrum rejection”, Daily Mirror Online, 14 February 2018 Ranga Jayasuriya, “Post mortem of an election disaster”, Daily Mirror Online, 13 February 2018 N Sathiya Moorthy, “Where from here after the LG polls?”, The Island, 13 February 2018


Afghanistan: Sohini Bose Bangladesh: Dr Joyeeta Bhattacharjee Bhutan: Mihir Bhonsale India: Ketan Mehta Maldives & Sri Lanka: N Sathiya Moorthy Myanmar: Sreeparna Banerjee Nepal: Sohini Nayak Pakistan: Mayuri Banerjee
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